Ramesh and Suresh were good friends who had known each other for years. Ramesh was a successful businessman and Suresh was an employee in a renowned company. They often met twice a week to catch up and talk about life, politics, and everything in between.
On one such day, Suresh confided in Ramesh about his financial troubles. He wanted to invest his hard-earned money, but he didn't know where to start. Ramesh listened patiently and realized that Suresh had no clear understanding of personal finance management.
So, he advised Suresh to start investing in mutual funds for long-term goals. Ramesh told Suresh that he had been investing in mutual funds for years and that it had helped him maintain a good lifestyle even after retirement. Suresh was surprised to hear this and asked Ramesh about his experiences.
Ramesh told him that mutual funds in India have a good track record of giving higher returns compared to other investment options like fixed deposits or savings accounts. He also explained the different types of mutual funds available in the market, such as equity, debt, and hybrid funds.
Suresh was still skeptical and asked the million-dollar question: "Is investing in mutual funds safe?" Ramesh smiled and said that mutual funds are managed by professionals who have strong knowledge of the market and take prudent investment decisions. Moreover, mutual funds are regulated by the Securities and Exchange Board of India (SEBI), which ensures transparency and accountability.
Suresh's mind was clear now. He trusted Ramesh's advice and decided to start investing in mutual funds for long-term goals. He thanked Ramesh for his valuable input and promised to be more mindful of personal finance management.
The two friends chatted for a while and parted ways, knowing that the conversation would make a positive impact on their lives. They realized that personal finance management is crucial for a healthy and happy life, and investing in mutual funds for long-term goals could be the best way to achieve financial stability.
In India, the above story is true for every middle class family. The bread earner of the family usually search for the best investment options and mutual funds are quite a fancy choice on a longer time horizon. The return of the mutual funds easily beats the return from FD, RD, PPF and even Bonds. Though these are safer choices as the principle amount is never under threat. The biggest scare of the earner is to loose the principle amount. Mutual funds are definitely risky but again these are managed by skilled managers as they sure are more knowledge bearer than a common man investing by himself.
Mutual funds are of many types based on your risk and return appetite. For a beginner, investing in index funds is the safest aspect as index has achieved a steady safe growth of about 10-12% annually. One can check the exact figures of return for any mutual fund from various sources on internet and all the data is available in public domain. One can check about where the manager of Mutual Fund will put the money and in what percentages as Mutual Fund's portfolio is accessible to investor. There are debt and hybrid funds which are relatively safer than aggressive ones.
Investing in mutual funds is as easy as just a few clicks on any smartphones. One of the best options is to sign up for ZERODHA KITE and apply through it. The advantage is that one can track daily for the market ups and downs and can invest in more than one options from the same platform. Zerodha Coin is the application for investing in Mutual funds. The investment is brokerage free via Zerodha coin. Zerodha offers investment in DIRECT or DIRECT Growth mutual funds from it's platform too.
The author shares his personal opinion here. Investments in Market are always subjected to risk. Consult a financial advisor before investing.